One thing that keeps coming up in emails from readers of my new book is surprise at just how much money one should accumulate before retiring. “Is it even possible for people with normal jobs to save that much money?” has been a common question.

Yes, it’s certainly possible. But I never said it was supposed to be easy.

What Level of Saving Does it Take Per Year?

As a starting point for analysis, imagine that you’re planning on working from age 22 to 65. That means you have 43 years to save enough money to get you through (potentially) another 30. In other words, it’s possible that you’ll be spending down your nest egg for almost as many years as you spent building it up. If we assume that:

• Your investment returns precisely match inflation,
• Your income grows exactly in keeping with inflation,
• The money you pay into Social Security ends up earning a rate of return exactly equal to inflation, and
• Your lifestyle does not change (so your spending increases in keeping with inflation as well),

…then you would have to save 34.9% (30 ÷ 73, minus the 6.2% you pay into Social Security) of your income each year in order to retire as planned! Obviously, most people don’t save anywhere near that much.

Fortunately, your income is likely to grow faster than inflation over the course of your career. And your investments are likely to outpace inflation as well.

On the other hand, it’s likely that you won’t keep your inflation-adjusted spending flat from age 22 onward. Most people have kids and/or raise their standard of living over time. Also, many people don’t start investing by age 22.

So how much do you need to save each year? There are too many variables to give a rule of thumb that would work for everybody. For most people, it’s probably a good deal less than the 34.9% calculated above. But it’s also a good deal more than the 5-6% that the average person actually is saving each year.

Takeaway: If you want to retire at 65 (or earlier) with confidence that you’ll have the same standard of living throughout retirement that you had prior to retirement, you will have to make sacrifices that most people around you are not making. Your rate of saving has to be unusually high.

Why Retire at 65?

Lifespans get longer and longer, yet most investors are still planning on retirement at 65 or earlier. In other words:

• We’re saving for longer retirements,
• We aren’t dedicating many more years to accumulating savings than prior generations did,
• We’re saving a smaller portion of our income per year than prior generations did, and
• There’s no reason to think that our investments will earn higher returns than those earned by prior generations.

So it’s no surprise that (according to the Employee Benefit Research Institute) only 16% of workers are “very confident” that they’ll have enough money to live comfortably in retirement.

Thankfully, there’s no biological rule that says that humans must stop working at any particular age. And 65, 70, and 75-year-olds are (on average) in better shape physically and mentally than they’ve ever been.

To me, the obvious solution to both:

• the societal problem of people not saving enough and
• the problem faced by individual investors who feel they aren’t on track to retire at 65

…is to abandon the idea that retiring at 65 and traveling the world is something that most people can do.

Instead of asking, “When can I retire?” more investors should be questions along the lines of, “What do I want to be when I grow up? And how soon can I leave my current work to do that instead?”